Classification MANAGEMENT: SHARING BEST PRACTICES

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Classification MANAGEMENT: SHARING BEST PRACTICES Doing Business in Bentonville April 16, 2009

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NWACC Category Management Curriculum Contributors 2

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Typical CPG Team Roles & Responsibilities What's The Diff?

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Modular Development Most individuals partner measured improvement with the CDM part. Those of us in the part know it's NOT Tetris! 4

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Category Development Planning INITIATE STEP 1 : Know your customer Define the classification Define achievement Roles & Responsibilities Identify colleagues Scope and Timing Define desires Determine who is shopping, what are their needs, how would they purchase? Comprehend obstructions and openings. STEP 6: Measure/COE Continual Measurement Conduct Correction of Errors Track Progress and modify arrange appropriately STEP 2: Know your Competition and your Category Assess class execution (advertise, contenders, & our). Characterize the champs and how they win. STEP 5 : Implement Execute the Plan STEP 3: Where would we like to go? Create class, sub-classification & section methodologies. Construct budgetary arrangements to accomplish classification part and techniques. STEP 4 : How would we arrive? Build up the arrangement: the right items, rack course of action, off-rack item position, class adjacencies, office design, accessibility, valuing & advancement. Vital Pricing/Promotion/In-Stock/Assortment/Line Review

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Category Definition Your Category Definition ought to… Be controlled by the client's perspective When I say "Vitamins," the client considers … Take into record "like client arrangements" Multivitamins and Calcium both dietary supplements that add to buyers' wellbeing and health Include items with substitutable and additionally complimentary advantages Centrum and Viactiv are Multivitamin Brands that may be substitutable Calcium and Vitamin D are Minerals/Vitamins that may be correlative

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Category Definition Your Category Definition ought not be dictated by… Manufacturer made by J&J or Wyeth Supplier dispersed by McLane or McKesson Brand sold under the Equate or Spring Valley names

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Category Definition A Category Definition ought to diagram a Strategic Business Unit Nutritional Supplements Example: A scope of dietary supplement items comprising of vitamins, minerals, herbs and additionally other natural/inorganic mixes, used to advance one's general wellbeing and wellbeing. Class: Nutritional Supplements Subcategory: Multivitamins Segment: Adult Multivitamins Sub-portion: Mature (or Age 50+) Adult Multivitamins

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Traditional Category Roles Quick Definitions Category Role Example Strategies Traffic Building High Share, Frequently Purchased, High % of Sales Transaction Building Higher Ring-up, Impulse Purchased Cash Generating High Turns, Frequently Purchased Profit Generating High Gross Margin, High Turns Turf Defending Used to Draw Customers Excitement Creating Impulse, Lifestyle Oriented Image Enhancing Frequently Purchased, Promoted, Impulse, Seasonal

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Category Management Process/Category Development Planning INITIATE STEP 1 : Know your customer Define the classification Define achievement Roles & Responsibilities Identify colleagues Scope and Timing Define desires Determine who is shopping, what are their needs, how would they purchase? Comprehend obstructions and openings. STEP 6: Measure/COE STEP 2: Know your Competition and your Category Continual Measurement Conduct Correction of Errors Track Progress and modify arrange as needs be Assess class execution (showcase, contenders, & our). Characterize the champs and how they win. STEP 5 : Implement Execute the Plan STEP 3: Where would we like to go? Create classification, sub-classification & section procedures. Construct money related arrangements to accomplish classification part and methodologies. STEP 4 : How would we arrive? Build up the arrangement: the right items, rack game plan, off-rack item position, classification adjacencies, office format, accessibility, evaluating & advancement. Vital Pricing/Promotion/In-Stock/Assortment/Line Review

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Who is Shopping? Who Is Consuming? Customer not CONSUMER not SHOPPER CONSUMER and SHOPPER Sports Drink Video Games Baby Formula Baby needs guardian to give her food College muscle head is going to quarters from practice; He needs a snappy jolt of energy Aunt purchases amusement for her nephew; She checks the bundle for evaluations

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The Difference Baby Formula THE SHOPPER (Mom) THE CONSUMER (Baby) WHO is she? Are there contrasts by wage, age, race, religious convictions, and so on.? WHERE does she live? Does that have any kind of effect? It is safe to say that she is voyaging or at home? At the point when does buy? At home, when her significant other watches the infant? Does she stock-up or look for deals? HOW can she shop? Take the transport versus minivan? WHY did she encourage the child with equation? Why does she pick that brand or fixing? WHO is she? Is it true that she is another conceived or nearly into semi-strong/strong sustenance? WHAT flavor or fixing makes her cheerful when her mother bolsters her? WHERE is she when she is eager? Store? Home? At the point when does she get ravenous? Late during the evening makes her tummy hurt so she needs the extraordinary sensitivity recipe. What amount would she be able to drink before she is full? WHY does she require recipe? Child needs parental figure to furnish her with support

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The Why Behind the Buy What is the purpose behind a buy by a customer? Is it the cost? Is it accommodation? Is it a specific brand? Does she enjoys a specific Retailer? Other? There can be numerous propelling variables…

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ABQQ Grid Quantitative In-Store Observation (Quantitative) Internet Survey Telephone Survey Loyalty Card Data Mail Survey Scan Data Household Panel Mall-Intercept Survey Behavioral Attitudinal In-Home Ethnographies In-Store Observation (Qualitative) Focus Groups Telephone Survey ShopAlongs Mail Survey Mall-Intercept Survey Qualitative

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ABQQ Grid Data Sources

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Data Points to Insight Who What Where When How Why Attitudes Scorecard Behaviors ACTIONABLE INSIGHTS

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Category Management Process/Category Development Planning INITIATE STEP 1 : Know your customer Define the class Define achievement Roles & Responsibilities Identify colleagues Scope and Timing Define desires Determine who is shopping, what are their needs, how would they purchase? Comprehend obstructions and openings. STEP 6: Measure/COE STEP 2: Know your Competition and your Category Continual Measurement Conduct Correction of Errors Track Progress and conform arrange in like manner Assess classification execution (showcase, contenders, & our). Characterize the champs and how they win. STEP 5 : Implement Execute the Plan STEP 3: Where would we like to go? Create classification, sub-class & fragment systems. Fabricate budgetary arrangements to accomplish class part and methodologies. STEP 4 : How would we arrive? Build up the arrangement: the right items, rack plan, off-rack item position, classification adjacencies, division design, accessibility, valuing & advancement. Vital Pricing/Promotion/In-Stock/Assortment/Line Review

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Consumer Decision Tree A Consumer Decision Tree is a statistical surveying study construct basically with respect to buyer investigate (overviews and at rack perception) and decides the point of view behind a buy choice. Incorporates Attitudinal and Behavioral Data Reveals the reasons why shoppers purchase a specific item Incorporates data in light of purchaser memory from past conduct Developed in view of necessities appraisal

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Market Structure A Market Structure is a statistical surveying study in light of real buy information over all channels. Factual examination and elucidation of item connection (substitutability) drives order. Advertise Structures points of interest the long haul sorts of choices that customers make from a general item portfolio. Behavioral Data Transactional information based from family unit board Reflects buy history over a timeframe (commonly 52 weeks)

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Know the Competition What are contenders? How are they distinguished? Who are key contenders? Channel Chain Category Occasion/Trip Type

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Connection to Segmentation Customer/Shopper Right Product , Modular Promotion Assortment Demographics Right Time, Seasonal Events Promotions Right Place, DC Store Market Right Quantity Display Open Stock

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Category Management Process/Category Development Planning INITIATE STEP 1 : Know your customer Define the class Define achievement Roles & Responsibilities Identify colleagues Scope and Timing Define desires Determine who is shopping, what are their needs, how would they purchase? Comprehend obstructions and openings. STEP 6: Measure/COE STEP 2: Know your Competition and your Category Continual Measurement Conduct Correction of Errors Track Progress and conform arrange as needs be Assess class execution (advertise, contenders, & our). Characterize the champs and how they win. STEP 5 : Implement Execute the Plan STEP 3: Where would we like to go? Create classification, sub-class & portion methodologies. Assemble monetary arrangements to accomplish classification part and techniques. STEP 4 : How would we arrive? Build up the arrangement: the right items, rack game plan, off-rack item situation, classification adjacencies, division format, accessibility, estimating & advancement. Vital Pricing/Promotion/In-Stock/Assortment/Line Review

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SWOT Definition Review Strengths An organizations qualities are it's assets and capacities that can be utilized as a reason for building up an upper hand. Shortcomings The nonattendance of specific qualities might be seen as a shortcoming. Now and again the other side of a quality. Openings Changes i

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